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Financial Services

Enabling enterprise, fueling growth

Access to financial services can be a lynchpin in driving economic growth; however, the Consultative Group to Assist the Poor estimates that nearly 500 million smallholder farmers in developing countries are financially excluded or underserved.

A household’s ability to improve their financial management skills and access savings and credit facilities is vital to achieving financial security and increasing household incomes.

Helping Underserved Populations Access Financial Services

Agricultural value chains that do not connect producers to markets often prevent the farmers from accessing essential inputs and markets and executing business transactions.

For more than 50 years, ACDI/VOCA’s mission has been to help underserved populations access financial services that allow them to make productive investments, which can help lift them out of poverty.

We have implemented a range of successful interventions that equip producers with appropriate financial solutions and strong connections with markets. We have grown microfinance institutions and facilitated loans for small and medium-sized enterprises. We have also developed specialized financing structures and created agricultural cooperative finance networks.

Facilitating Financial Connections and Investment in Value Chains

All actors along the agricultural value chain must have the tools and connections to engage financially and grow their businesses. Our value chain finance guide helps actors design and implement financing solutions that will enable them to benefit from market opportunities.

For farmers who are ready to more actively engage with U.S. or international markets, we build their capacity for business and financial planning, enabling them to apply for the loans they need to grow. We also engage with and train microfinance and small and medium-sized enterprise (SME) finance providers in developing products and services to serve this population.

As farmers, producer associations, and cooperatives develop the capacity to be active commercial market players, we shift our focus to supply more sophisticated financial services. For example, we work to more directly finance the cultivation and export of coffee and cocoa or to close the gaps in a commodity value chain.

This value chain approach has resulted in a wide range of successful investments, including the following:

Building the Financial Skills of Disadvantaged Groups

Poor Households
Many smallholder households are farming on small plots of land and do not have the basic tools to provide financial security for themselves. We, therefore, introduce basic financial literacy skills, village savings programs, and concepts such as Farming as a Business. These programs provide poor households the foothold they need to begin moving out of poverty.

Women
In many countries, women lack access to resources that allow them to fully engage in economic development activities. ACDI/VOCA tailors our financial services to meet the specific needs and constraints faced by female farmers or entrepreneurs. Learn more about our gender empowerment approach.

Enabling Financial Services to Reach Underserved Markets

Building robust financial ecosystems in developing economies means training and supporting financial institutions to see the agricultural sector as an attractive market for their services.

We assess financial institutions, including traditional banks and microfinance institutions, to identify areas where they need to build capacity to serve vulnerable groups with more appropriate products. We train staff, helping them understand agricultural finance, evaluate a borrower’s creditworthiness, and structure appropriate financial products that reduce the risks for lenders and borrowers.

We connect individuals, businesses, organizations, and communities to the financial technical expertise they need including world-class consultants and volunteer experts. For example, we have recruited over 200 financial professionals from the United States who have volunteered their time to equip these institutions through the USAID Farmer-to-Farmer program.

We have developed and implemented a range of innovative financial solutions that enable institutions to provide farmers and agribusinesses with the services they need.

Frequently there are policy and regulatory reforms needed to improve the flow of financial services into these rural and marginalized communities. We assist financial institutions to engage with policymakers on these issues to advocate for reforms in laws and regulations.

We maintain close relations with nine of these financial institutions, which have formed the ACDI/VOCA Network of Affiliated Financial Institutions (AFIs). Members of the network have a combined total of nearly $300 million in outstanding loans to 180,000 clients, of whom 44 percent are women. Savings accounts exceed $7 million with 12,000 savers.